Answer:
Bad Debts Expense $ 4500 Dr
Explanation:
Wrangler Inc.
Bad Debt Expense = 0.5 %of Credit Sales
Bad Debt Expense = 0.5 % of 900,000= $ 4500
The percent of credit sales method estimates bad debts expense at a prior percentage of bad debts with the current credit sales.
Since the Allowance method is used the bad debts expense will be 0.5 % of net sales which is $ 4500
Allowance for Doubtful Accounts (credit balance) 200
Bad Debts Expense $ 4500 Dr
Adjusted Balance of Allowance for Doubtful Accounts (credit balance) 4300
